Introduction: A Hidden Risk in Your Investment
Imagine a scenario where you carefully analyze the property description in one of your leases, only to discover later that it doesn’t fully encompass the lands you thought were included. Suddenly, you find yourself at risk of losing a significant portion, if not the entirety, of your investment. So, what can you do in such a situation? The answer lies in understanding whether the lease contains a “Mother Hubbard clause.”
What is a Mother Hubbard Clause?
The Mother Hubbard clause, also known as a “cover-all” clause, plays a critical role in oil and gas leases. It acts as a safeguard, allowing for the inclusion of lands not explicitly described in the lease or interests that arise after the lease is issued. In essence, it serves as an insurance policy to protect against unintentional omissions in the property description and to cover after-acquired interests, such as those acquired through adverse possession.
While variations of the Mother Hubbard clause exist, it typically consists of two basic components. The first component is a property catch-all provision that extends the lease to “adjoining, contiguous, or adjacent lands owned by the lessor.” The second component covers any future interests acquired by the lessor through revision, prescription, or other means. Most modern Mother Hubbard clauses incorporate both of these safeguards.
Unraveling the Name’s Origins
The intriguing name “Mother Hubbard clause” may have its roots in the opening stanza of the “Old Mother Hubbard” nursery rhyme. Just as Old Mother Hubbard found her cupboard bare, lessees dealing with inadequate property descriptions might discover that their “cupboard” is also empty, leaving them without the protection they assumed they had. Another possibility is that the name stems from the late 1900s, where “Mother Hubbard” referred to a shapeless woman’s dress or cloak. This association highlights the ill-defined nature of certain property descriptions, especially those involving metes and bounds or moveable landmarks like fence posts or rocks. Regardless of its exact origin, the name “Mother Hubbard clause” is memorable and easy to recall.
Additional Considerations: Ensuring Effectiveness
When drafting a Mother Hubbard clause, it’s crucial to be aware of certain factors that could impact its effectiveness. First, it’s important to use precise terminology. Care should be taken not to interchange “and” with “or,” as they have distinct meanings. While “adjoining, contiguous, and adjacent” implies a more restrictive requirement, “adjoining, contiguous, or adjacent” offers greater flexibility. A court’s interpretation of these terms can significantly influence whether the Mother Hubbard clause covers additional lands.
Second, it’s vital to consider unique interpretations of the clause in different jurisdictions. Some states may impose limitations on the scope of the Mother Hubbard clause. For instance, Mississippi does not extend its protection to cover large tracts of land, while Texas restricts its application to lands that were not known to exist by both parties when the lease was issued. To maximize its effectiveness, a thoughtfully crafted Mother Hubbard clause should align with the specific interpretations of the state where the leased premises are located.
Third, if the bonus or rental payments are based on per acreage, additional compensation may be necessary to cover any additional acreage included through the operation of the Mother Hubbard clause. Including specific language stating that the payments are based on represented acreage can help avoid potential disputes over additional payments.
Lastly, while the Mother Hubbard clause allows for the inclusion of inadequately described lands, it may not provide sufficient notice to third parties under a state’s recording laws. To ensure proper notice, lessees should record an affidavit referencing the lease, quoting the Mother Hubbard clause, and describing the lands unintentionally omitted but now included in the lease.
By including a carefully drafted Mother Hubbard clause in your lease, you can protect your investment against latent defects in the property description or interests owned by the lessor.